Multi family or Single family with VA loan?

Question

Hi all. I’m looking to become an investor in the KC area and I was curious if I should pull the trigger on a multi family or single family home with the VA loan? The problem with multi family is that the inventory is VERY low and not a ton of great locations. I was thinking about buying a single family home, renovating it, and then rent it out a year later when I move out. The thing is, is this normal? Buying a house a year? I’m a 25M and looking to start soon.

Any insight would be appreciated thank you!

Alex Olson · Answer

I wish I would have bought a fourplex in a class A or B location in KC when I was your age. Instead I bought a townhouse and did terrible with it. Buy a fourplex in class a or b location. May stretch your budget but will be worth it. I am in KC and have access to fourplexes here.

Jonathan Greene · Answer

Taking action is not buying. You should not feel compelled to buy, but I agree that you should take action. Taking action for you right now, because it doesn't seem like you know much, is going to real estate investor meetups, reading books, listening to podcasts, and asking a lot of questions while building relationships with other investors.

A VA house hack is overall a better option, but comes with more overhead. You could room hack a single-family in a similar way, but what is your goal? Inventory is low everywhere, that should not change what you buy. If you've never renovated anything, it's silly to think you can just buy a home, flip it, and do well in this environment.

Milton Chamberlain · Answer

You are correct, small multi listings in A/B markets are less common, but do come on occasionally. A desirable side by side with 3 bed/2 bath per unit will generally run $350k-$475k dependent on variables. I would check with your lender to confirm if 0% can be used for 3 and 4 units...they might require 5% down.

SFR investment with rehab can also be a great way to invest in real estate. it just depends what are your strengths and goals and which strategy will best serve you.

buying a home a year is normal for some. depends on what your goals are.

Id think of it like planting a tree: being 25, time is on your side. if you have a solid income with healthy DTI, I would suggest taking advantage of it by house hacking small multi in A/B market and let father time be your friend. By 30 you will have equity to play with and appreciated into some great cash flow.

happy to chat anytime

Scott Allen · Answer

@Nicholas Halterman VA loans are great because you can do 0% down and continue to use your savings towards any updates or repairs you would like to do. You can also structure your offer with I know at least a 2% seller credit so that you can be paid at the closing table when you're buying.

Tough part with VA loans is they are still similar to FHA loans and can be a more strict appraisal process. If a property needs a lot of work, it might have a hard time passing VA (seller won't make any repairs to get the property sold).

Offer on the multi-family ones in the locations that you like. If you lose to a different offer, it is what it is. It's apart of the process on your first one.

If you do a single family and plan to have 2-3 other roommates that are about 25 years old as well, you might go a little bit crazy. If you can find a duplex that works, you might not really need a roommate at all or at least one roommate but will need a tenant on the other side to offset the mortgage. Get rid of the side with the tenant that needs the most work or seems like they would be a nuisance to you to have to live next to (30-60 day notice on their door when you close if they're month to month) - update it and get it ready to get market rent for when you plan to do another one a year to two years later.

Carl Millsap · Answer

Nicholas,

There are a lot of ways to skin a cat, the important thing is you take action. Both options are viable.

1. A duplex / triplex where you house hack w/ the VA loan is a good option if the numbers work.

2. Buying a single family below market, living in it then refinancing and renting is a good option.

Do the research...do you have the skills to renovate a house? Do you know how to negotiate and hold contractors accountable for renovations you can't do? Do you know what to look for?

All of this is doable, don't let the questions above stop you those are just things to consider which thousands of people have figured out and you can as well.

Pick an option then execute. This is a good business, it can and will change your life if you Execute!

Multi family or Single family with VA loan?

Multi family or Single family with VA loan?

Most Popular Reply

5 Replies